How to Set a Budget for Buying a House

December 18th, 2017 | By | Posted in Uncategorized

House Are you in the market for a new home in PebbleCreek, Arizona? Being prepared to buy a home includes setting a realistic budget. Once your budget is established, it’s time to begin your search for homes for sale in PebbleCreek. Setting a budget is not difficult, but it does take some time to gather the necessary information. Here are five steps to set a budget for buying a house.

Know Your Income

A budget helps you gain better understanding of your spending habits. The first step helps you know exactly how much income is earned. Adding up income is the easiest piece of the budget puzzle. Gather your paycheck stubs, and if you’re purchasing with a partner, be sure to include their income. Add all monthly income. Don’t forget small side jobs you do, or items you sell online. No matter how small the amount, any funds coming in to the household are important to include in the budget.

Understand Your Expenses

Create a list of your household expenses. This may be the most challenging task because it forces you to take an honest look at your finances. Household expenses include more than just rent (or mortgage), utilities, and food. Don’t forget to include medical expenses, clothing, and entertainment. The key to coming up with a workable budget is tracking each dollar you spend. Save all receipts for the month, even that small coffee you buy each morning on the way to work.

Research the Cost

You’ve looked at income and expenses and believe you know how much you can afford. Now, it’s time to set appointments to look at PebbleCreek real estate, right? Hold on for a moment. You may not be quite ready to meet with a realtor. Before you look at homes, it’s important to know what home ownership will cost. The mortgage payment is typically the item with the largest dollar amount. Don’t forget to calculate maintenance and repair costs, lawn care, and even home décor if you plan to purchase new furniture and accessories. Keep in mind a potential change in cost for utilities, especially if your new home comes with an increase in square footage. A bigger house means a more expensive utility bill.

Create a Budget for Tomorrow

Always leave room in your budget for what may happen in the future. You can’t always predict what changes life may bring in the next few years so it’s important to have a place in the budget for the unknown. A plan for unexpected future expenses may save future heartache. If you plan for tomorrow’s surprises by allotting a specific amount each month for savings, you will be better prepared for the unexpected.

Don’t Be Afraid to Make Changes

After tallying up your current household expenses, you may discover an imbalance between income and spending. Now is the perfect time to deal with those issues and make adjustments to spending habits. Your rent or mortgage today may be a fixed expense. Eating out and purchasing that expensive daily coffee drink are areas where you can make adjustments. You might be surprised at what expenses can be cut or simply decreased to allow more money for savings. The advantage of budgeting today for a new home tomorrow is that you will be more ready than the average home buyer. You will better understand not only your own finances, but will be less inclined to look at homes in a price range over what you can comfortably afford. Once you’ve made adjustments to your budget and have a sufficient down payment, it’s time to contact your realtor in Pebblecreek. Happy house hunting!

 

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